Repealing and Replacing Obamacare – The Only Way

President Trump meets with congressional leaders on health care at the White House.

Over the past week, there has been growing consternation, and some angst, between conservative Republicans in Congress, and the House leadership, led by House Speaker Paul Ryan, in respect to the leadership’s proposed legislation to repeal and replace the Affordable Care Act, also known as, “Obamacare.”

This conflict is centered on provisions in the Ryan bill to include a health insurance tax credit for individuals purchasing their own policies, and the failure to rescind the expansion of Medicaid, which provided insurance to 10 million formerly uninsured Americans, one of the central components of Obamacare. Conservatives deem the expansion of Medicaid as the growth of an entitlement program; and the health insurance tax credit as the establishment of a new entitlement program – an act antithetical to conservative values.

President Trump supports the Ryan proposal, despite its shortcomings, as the only viable means of repealing and replacing Obamacare, given the current partisan composition of congress. Realistically construed, the president is correct; and a brief review of how Obamacare was enacted provides the basis for understanding why.

HHS Secretary Tom Price with US House Speaker Paul Ryan and other Republican congressional leaders.

Obamacare was passed solely by Democrats in both houses of congress through a senate process called “Reconciliation.” Reconciliation was the legislative framework used by senate Democrats to pass Obamacare by a simple majority of 51 votes, instead of the customary 60 votes required to pass legislation in the U.S. Senate.

In order to fully repeal Obamacare, Republicans would need 60 votes in the Senate. There are currently 52 Republican senators, and they can expect no senate Democrats to vote for repeal. In fact, Republicans do not even have 51 votes for full repeal. Senators Murkowski, Collins, Flake, and others will not vote for full repeal, due to their fear of a political backlash as a consequence of terminating the Obamacare Medicaid expansion, which covered approximately 10 million formerly uninsured individuals. Senator Rand Paul’s full repeal proposal does not have 60 votes; or even 51 Republican votes for that matter. The fact that he is short of 51 Republican votes explains why there are no senate Republican co-sponsors of his proposal.

Thus, full repeal of Obamacare is impossible at this time, as it can be blocked by senate Democrats. Notwithstanding, President Trump and Republicans in congress, have a means of repealing Obamacare, by instituting a three-phase combined legislative and administrative process; and this process involves the use of Reconciliation, the same process Democrats used to pass Obamacare.

Phase 1 involves the elimination of the individual and employer insurance mandates, and taxes and penalties; and establishes health savings accounts. Phase 2 involves Health and Human Services Secretary Tom Price using his executive authority to rescind Obamacare regulations. Phase 3 involves passing legislation to permit the sale of health insurance nationwide, which will impel nationwide competition; reduce the cost of insurance policies, and provide more options for consumers; establishing risk pools; permitting formation of small business, and farm associations to purchase insurance at discounted rates; and eliminating the Medicaid expansion, by block granting Medicaid to the respective states, giving them control over how the funds are allocated.

The three-phase approach is the only means of repealing and replacing Obamacare at the present time. Certainly, this approach depends upon trusting the president to ensure phases 2 and 3 are implemented, shortly after phase 1 is complete.

Some conservatives have raised the prospect of passing the full repeal bill that was sent to President Obama. However, this bill was not a full repeal, but used Reconciliation, requiring only 51 senate Republican votes. In effect, this meant that Obamacare was never repealed but only defunded by the bill; which mirrors Phase 1 of the current three-phase approach proposed by the House leadership, and supported by the president.

There may be some adjustments to the proposed legislation, but nothing major, because of the Reconciliation rule restrictions. At this time, those who support repealing and replacing Obamacare, have to back the president’s “play.” Rest assured, if there was a better play right now President Trump would play that hand on behalf of “We the People.”